Jan. 6 (Bloomberg) -- The Empire State Building’s managers
were sued for the second time in two weeks over their decision
to take the iconic New York skyscraper public last year.

Hope Ratner and Mary Jane Fales, two of about 2,800
longtime investors in the 103-story tower, filed the lawsuit
today in New York State Supreme Court in Manhattan. The
plaintiffs, who seek class-action status for their complaint,
accuse the managers, Peter Malkin and his son Anthony, of
rejecting higher offers for the building, including one for
about $500 million more than investors received for their
interests.

Empire State Realty Trust Inc., whose properties include
the building, sold 71.5 million shares for $13 each on Oct. 1.
The sale culminated an almost two-year quest by the Malkins to
take the skyscraper and 20 other New York-area properties
public, a process marked by battles with longtime investors.

The Malkins “refused to meet with any of the bidders and,
to the best of plaintiffs’ knowledge, never had one substantive
word of dialog with any of them,” Ratner and Fales said in
their filing, which also names Empire State Realty Trust as a
defendant.

“These claims are wholly without merit and we will respond
to them in court,” Hugh Burns, a spokesman for Empire State
Realty Trust at Sard Verbinnen & Co., said in an e-mail.

Of about 2,800 Empire State Building legacy unit holders, a
minority challenged the real estate investment trust proposal,
preferring to keep a steady income stream and the bragging
rights that come with owning a piece of a landmark.

Empire State Realty Trust rose 1 percent to $15 in trading
today in New York.

Separate Group

A separate group of investors sued the Malkins last month
over claims they deprived thousands of early investors of as
much as $410 million in profit when they took the tower public.

Anthony Malkin is chairman and chief executive officer of
the new publicly traded company, which owns six other office
properties in Midtown Manhattan, including the 55-story One
Grand Central Place. Peter Malkin is chairman emeritus.

New York State Supreme Court Justice O. Peter Sherwood in
Manhattan in May approved a $55 million settlement of lawsuits
over the plan to take the building public, after rejecting a
request to intervene in the case by investors opposed to the
settlement.

Buyout Provision

Sherwood in February denied a motion by Ratner, Fales and
four other investors to intervene in the case, while allowing
them to argue their claim that a provision allowing the buyout
of investors who voted against the proposal for $100 was
illegal. Sherwood later declared the buyout provision legal, a
ruling that the dissenters have appealed.

Peter Malkin told an unnamed investor in a voice-mail
message after the settlement was approved that the person’s
shares would be worth “over $1 million,” as the company was
seeking the final votes to proceed with the IPO. The shares were
worth less than $700,000 on the first day of trading and remain
restricted from being sold under the rules governing the
offering, according to the complaint.

In November 2011, one day after the Malkins disclosed their
intent to make the Empire State Building part of a REIT, they
unilaterally amended its governing documents to add a “poison
pill” provision, blocking anyone from acquiring more than 6
percent of its shares, according to the complaint.

“There was no other purpose for the poison pill amendment
other than to prevent potentially superior tender offers” for
the building’s unit holders, the plaintiffs said in the latest
suit.

The 1,453-foot (443-meter) skyscraper was the tallest
building in the world until New York’s World Trade Center was
built in the 1970s. Its 86th- and 102nd-floor observatories
attract about 4 million visitors a year, according to its
website.

The case is Ratner v. Malkin, 650029/2014, New York State
Supreme Court, New York County (Manhattan).

To contact the reporters on this story:
Chris Dolmetsch in New York State Supreme Court in Manhattan at